How To Trade Intraday With Help From India VIX

Open ZERO Brokerage FREE Share Trading Account - Buy and Sell Stocks Without Brokerage - Set GTT (Good Till Triggered) Orders on System and Forget

This article is part of my newsletter sent to my subscribers. If you do not want to miss a post you can subscribe above.

I also wrote earlier in my blog that India VIX and Nifty movement are inversely proportional. You can read that post here:
https://www.theoptioncourse.com/nifty-and-india-vix-are-inversely-proportional/

What is India VIX?

India VIX is a volatility index based on the NIFTY Index Option prices. From the best bid-ask prices of NIFTY Options contracts, a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 calendar days. You can read more here:

https://www1.nseindia.com/products/content/equities/indices/india_vix.htm

So basically not just Intraday, but India VIX can help guess market direction to some extent for positional traders as well.

How India VIX and Nifty are Related

Today (12-Sep-2022), just to explain to you the movement of both I have their screenshot and pasted it below. See how India VIX is decreasing and Nifty is increasing.

This is the screenshot of India VIX on 12-Sep-2022 at around 1 pm when markets were open:

India VIX on 12-Sep-2022

Source: Google

This is the screenshot of NSE on 12-Sep-2022 at around 1.10 pm when markets were open:

NSE 12-Sep-2022

How India VIX can help you decide the market direction for intraday trades

If you are an Intraday trader India VIX can help you take a trading decision. Just go against the India VIX trend for the day. You can also go with the trend of the Index – but India VIX trend is more clear than the Index trend. You do not need any technical indicators to see the trend from your naked eyes. Just a glance will help you to guess the trend for the remaining of the day.

Can India VIX be Manipulated?

India VIX is machine-generated, so it cannot be manipulated. Though nowadays it is very hard to manipulate stock movements, if not impossible. But India VIX cannot be manipulated in any way.

Read How Illiquid Stocks are Manipulated

Illiquid (low volume) stocks are manipulated by fraudsters who login into someone’s account by somehow getting their password and short sell, for Intraday only, in huge quantities which creates real (but illegal and fake) volume. This crashes the stock. When the stock falls, they buy that in their account and wait for a reversal. When the stock reverses back to where it was – they sell and book profit. All of this is done in a few seconds. This is called a flash crash.

Can this illegal trade be reversed?

Unfortunately, unless the person in whose account the fraud was done, does not report this to NSE/BSE where the trade took place within 24 hours, it becomes a legal trade. Even if they report, they have to give proof that some fraudster had taken their password and did the fake trading to make sure the stock falls.

But even if NSE/BSE reverses the trade the damage would have already been done. The person who did the freak trade would have withdrawn all cash in his bank account. After this, the only option for the person who got cheated is to file a case in a court of law. Unfortunately, you know that in India it may take decades for a case to finish.

However, luckily nowadays due to strict surveillance by SEBI and market regulators, these things are not very common, but still, you must keep changing your Demat account password every 3-4 months and must not write it down anywhere. Just remember it as you remember your name and make sure not to give your Demat account details to anyone for whatsoever reason.

It is even more challenging to flash crash Index yet it does happen. You can check the dates here:
https://en.wikipedia.org/wiki/Stock_market_crashes_in_India

So trade safe and be safe.

Have you ever been asked about your trading password or any other details? You can write in the comments section below.

Related post:
How to guess Sensex and Nifty share price today for intraday

COPYRIGHT INFRINGEMENT: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement.

INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However, every trade depends on the trader and his level of risk-taking capability, knowledge and experience. Moreover, stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website.

DISCLAIMER: I am NOT an Investment Adviser (IA). I am an Authorized Person (AP) of a Stock Broker. I do not give tips or advisory services by SMS, Email, WhatsApp or any other forms of social media. I strictly adhere to the laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles on this website. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given on this website. I am not responsible for any investment decision you take after reading an article on this website. Click here to read the disclaimer in full.

Disclaimer | Privacy Policy | About Me | Conservative Option Course
Find 200+ testimonials of my course:
What Traders Say About This Course

My student gets the Winner's Certificate of Zerodha 60-day Challenge - Click here and Open Stock Buy and Sell Free Account with Them Today!!!

Open ZERO Brokerage FREE Share Trading Account - Buy and Sell Stocks Without Brokerage - Set GTT (Good Till Triggered) Orders on System and Forget

Traditional brokers charge a lot for brokerage; however, this broker does not charge anything for stock buying and selling. Also, you can set GTT (Good Till Triggered) order after buying a stock, so that the system can sell the stock automatically at your target price even if you are not monitoring the market. Only 25k is blocked for option selling with hedge. Also, you get a lifetime free account in Sensibull (virtual trading app & strategy builder) which charges Rs.800/-+GST a month. It takes 5 minutes to open an account online. Click here and Open Free Account with Them Today >>